BAKU, Azerbaijan – SOCAR and the BP-led Azerbaijan International Operating Co. (AIOC) have signed a letter of intent (LoI) for future development of the Azeri-Chirag-Gunashli (ACG) field in the Caspian Sea.
It covers development of the field in the Azeri sector until 2050, establishing commercial terms that should lead to finalized full-termed agreements over the next few months.
Currently ACG produces from six platforms. Other shareholders in AIOC are Chevron, INPEX, Statoil, ExxonMobil, TPAO, ITOCHU, and ONGC Videsh.
Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey, said: “Today’s signing allows us to look ahead to the next chapter in ACG’s success and indeed in Azerbaijan’s energy story.
“We believe together we will be able to build on this success by continuing to combine the country’s potential and experience with leading technology. This agreement will enable future investments and projects, and will bring many thousands of jobs in the years ahead.”
ACG, 100 km (62 mi) east of Baku in water depths of 120-170 m (393-558 ft), is the largest producing oil field in the Caspian Sea and covers an area of more than 432 sq km (167 sq mi). The depth of the reservoir is 2,000-3,500 m (6,562-11,483 ft).
The existing ACG PSA, signed in September 1994, was for 30 years. Oil production started in November 1997: to date the field has produced more than 3 Bbbl of oil with around $33 billion of investment.
Production heads to a terminal in Sangachal near Baku and from there is exported to global markets, primarily via the Baku-Tbilisi-Ceyhan oil export pipeline and the Western Route Export Pipeline to Supsa.
BP operates on behalf of AIOC and the contractor parties to the ACG production-sharing agreement.